Sylva may decrease size of proposed taxing district

Leaders of a downtown Sylva movement are considering downsizing a proposed special taxing district to encompass only the core downtown area.

The boundaries for the proposed special taxing district currently sprawl far beyond the blocks traditionally considered downtown. The large size could hamper the ability of the Downtown Sylva Association to focus on its mission. It could also hamper the chances of the special taxing district going through.

The special taxing district has to be approved by the Sylva town board. Some town board members have said they won’t approve it unless a significant majority of the business and property owners in the district support it. Advocates of the special taxing district are currently drumming up support from as many business and property owners as possible, but a good number are skeptical.

Some of those skeptics could be cropped out of the proposed district by tightening up the boundaries to the core downtown.

“If we need to cut it down to make it happen, by all means,” said Mary Beth Druzbick, spokesperon for the DSA’s effort.

Trimming the boundaries would also make it easier for the DSA to fulfill its mission, said Maurice Moody, a downtown leader as well as a town board member.

The special taxing district would raise money to promote and improve downtown. It’s a common model in many successful downtowns: property owners or the businesses they lease to pay an extra tax and theoretically reap the benefits of increased traffic and commerce.

In Waynesville, which has had a special taxing district for its downtown for 20 years, is limited to the core downtown blocks. Businesses just beyond the historic downtown core have asked to be added to the special taxing district and be a part of the Downtown Waynesville Association.

But leaders of the Downtown Waynesville Association have been reluctant to add more blocks to the district — even though it would bring in more money for the organization — because it could compromise the core mission to focus on downtown.

The special taxing district on the table in Sylva is double the size of Waynesville’s. Sylva Town Manager Jay Denton said smaller boundaries for the Sylva special taxing district would make more sense.

“You do have a very unique district downtown that runs from the courthouse to the Coffee Shop,” Denton said, referring to a local business landmark considered the entrance to downtown. “It’s its own little world.”

How it got that way

The Downtown Sylva Association used to have smaller boundaries limited to the core downtown, but the organization was compelled to expand those boundaries about three years ago.

The organization was being funded by the town of Sylva to the tune of $20,000 a year. The money wasn’t generated by a special taxing district, but came from the general town coffers.

A town board member at the time was concerned that those dollars were being used to exclusively and should help the district outside the immediate downtown area as well, and the boundaries of the Downtown Sylva Association.

That argument doesn’t apply anymore, however, since the Downtown Sylva Association only gets $2,000 from town coffers. Last year, the town board cut its funding to the DSA in a split 3 to 2 vote. That spurred downtown leaders to seriously pursue a special taxing district, an idea they had already been toying with.

Since the revenue would be generated by only those in the district, it frees up the DSA to redraw the boundaries wherever it likes.

“If the desire was there, you could shorten it back down,” Moody said.

The current boundaries are so large it includes several residential homes outside the core downtown business district. Downtown leaders did not intend for homeowners to pay the special tax, since they don’t have a financial interest in seeing increased downtown commerce. DSA leaders hoped the residential homes within the district’s boundaries would simply be exempt.

But DSA leaders learned this week that won’t be possible after all. Sylva Town Manager Jay Denton sought a legal opinion from the Institute of Government in Chapel Hill and got this reply: “An exclusion of residential property from taxation with in the (special taxing district) would violate state constitution.”

Since imposing the tax on residential homes won’t go over very well, the DSA will at least have to redraw the lines to exclude those homes. Drawing a jagged line around individual homes could get quite tricky, however, and the easiest thing to do might simply be downsizing the entire district. The topic of the boundaries was likely discussed at the Downtown Sylva meeting Wednesday, Jan. 24.